German Stocks Decline for Fifth Day; Steelmakers Lead Retreat

By Stefanie Haxel

Jan. 13 (Bloomberg) -- German stocks fell for a fifth day as an additional stimulus package forged by Chancellor Angela Merkel’s coalition failed to ease concern the economic slump will curb corporate profits.

ThyssenKrupp AG and Salzgitter AG, Germany’s biggest steelmakers, dropped at least 3 percent each after Alcoa Inc. of the U.S. posted its first quarterly net loss in six years, fueling concern demand for metals may decline further.

The benchmark DAX Index slipped 2.1 percent to 4,622.8 as of 1:04 p.m. in Frankfurt. DAX futures expiring in March dropped 2 percent. The broader HDAX decreased 2.1 percent.

Germany’s coalition government agreed to spend an additional 50 billion euros ($66 billion) this year and next, its second attempt to stem the worst recession since World War II in Europe’s largest economy.

“The package is priced in and though it’s a huge amount, it’s quite small in international comparison.” said Matthias Jasper, head of equities at WGZ Bank in Dusseldorf. “I expect the coming earnings season to be the worst and weakest ever and a constant negative news flow.”

The DAX Index tumbled 40 percent in 2008 as credit- related losses and writedowns at financial firms topped $1 trillion worldwide amid the financial market turmoil.

ThyssenKrupp, Germany’s largest steelmaker, retreated 5.4 percent to 17.51 euros. Salzgitter, the second-biggest, dropped 3 percent to 51.33 euros.

Alcoa Loss

Alcoa reported a fourth-quarter net loss of $1.19 billion, compared with net income of $632 million a year earlier. The largest U.S. aluminum producer cited “historic” price declines and said demand for the metal may continue to weaken in 2009.

SGL Group, the world’s largest maker of carbon and graphite products, plunged 8.8 percent to 18.11 euros.

“Cathodes used to make aluminum have become an important business for SGL and now there is an obvious downturn in the aluminum industry,” said Lars Hettche, an analyst at Bankhaus Metzler in Frankfurt who rates the stock a “sell.”

Deutsche Postbank AG climbed 3.6 percent to 13.31 euros. Deutsche Bank AG said it’s sticking to plans to buy a stake in the retail lender in the first quarter. Deutsche Bank spokesman Michael Lermer declined to comment on a report in the Handelsblatt newspaper that it is seeking to change the terms of the Postbank deal.

Postbank’s majority owner Deutsche Post AG fell 4.7 percent to 9.88 euros, the steepest drop in more than a month. Europe’s biggest postal service said it’s “committed” to the contract it signed with Deutsche Bank last year, company spokeswoman Nicole Mommsen said today.

The following stocks also rose or fell in German markets. Symbols are in parentheses.

Fraport AG (FRA GY) lost 3.3 percent to 28.83 euros. Commerzbank AG reduced its share-price estimate for the owner of Frankfurt Airport 10 percent to 27 euros.

Hypo Real Estate Holding AG (HRX GY) plunged 7.2 percent to 2.18 euros. The property lender bailed out by the government received an extension on 30 billion euros of government aid.

Interseroh AG (ITS GY) declined 2.2 percent to 38.15 euros. Goldman Sachs Group Inc. lowered its price projection for the recycling company 33 percent to 45.95 euros.

To contact the reporter on this story: Stefanie Haxel in Frankfurt at shaxel@bloomberg.net.